US markets fell yesterday and Asian shares have followed suit this morning as traders digest a hot US inflation report that some fear made it even less likely that the Federal Reserve will cut interest rates in March.

Why rates interest matters to the stock market: Lower rates traditionally = more money seeking (hopefully) better returns in public equities. Traders also generally figure that lower rates = better fortunes ahead for many types of companies on the back of more consumer spending and cheaper borrowing for corporates.

What happened yesterday: The Dow, S&P and Nasdaq all dropped 1.4-1.9% yesterday after data showed consumer prices in the US had risen in January by the most in eight months. Observers had expected inflation to continue cooling, but it ticked up to 3.1% on an annual basis.

Where we stand right now: The Nikkei and Kospi are down in early trading. US futures have steadied, pointing to a soft (but not outrageous) opening on Wall Street, and European equities look set to dip at the opening bell.

BTC hits the USD 50k mark for the first time in two years: BTC hit the USD 50k mark yesterday for the first time since December 2021, rallying on the back of expectations of interest rate cuts later this year and optimism that the US government’s approval of spot BTC exchange-traded funds last month could herald larger mainstream acceptance, Reuters reports. BTC was trading at around USD 49.7k as of midnight last night.

ADX

9,351

+0.3% (YTD: -2.4%)

DFM

4,219

+0.2% (YTD: +3.9%)

Nasdaq Dubai UAE20

3,744

+0.4% (YTD: -2.6%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.1% o/n

5.1% 1 yr

TASI

12,404

+0.9% (YTD: +3.7%)

EGX30

28,604

+0.4% (YTD: +14.9%)

S&P 500

4,953

-1.4% (YTD: +3.8%)

FTSE 100

7,512

-0.8% (YTD: -2.9%)

Euro Stoxx 50

4,689

-1.2% (YTD: +3.7%)

Brent crude

USD 82.77

+0.9%

Natural gas (Nymex)

USD 1.69

-4.5%

Gold

USD 2,006

-1.3%

BTC

USD 49,668

-0.8% (YTD: +17.0%)

THE CLOSING BELL-

The DFM rose 0.2% at yesterday’s close on turnover of AED 346.6 mn. The index is up 3.9% YTD.

In the green: National Industries Group Holding (+14.7%), International Financial Advisors (+10.0%) and Ekttitab Holding Company (+8.8%).

In the red: National International Holding Company (-9.5%), Emirates Reem Investments Company (-4.5%) and Takaful Emarat (-3.7%).

Over on the ADX, the index closed up 0.3% on turnover of AED 1.0 bn.

CORPORATE ACTIONS-

Phoenix Group has acquired “related” Netherlands-based entity Phoenix Technology Solutions for EUR 539k, according to a bourse disclosure (pdf). The acquisition, valued at EUR 539k, will boost the company’s presence in Europe by tapping Phoenix Technology Solution as a marketing platform for the region.

Agthia to dissolve inactive businesses: UAE-based F&B firm Agthia Group will dissolve a number of its dormant wholly-owned subsidiaries, including Gulf National Forage Company and Agthia Distribution, the company said in an ADX disclosure (pdf). The company will dissolve Shaklan Plastic Manufacturing after merging it with its other wholly-owned subsidiary, Al Bayan Purification and Potable Water.

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